Contractor announces 92 layoffs on North Slope, but says employees might find new work

Another round of job reductions in Alaska's North Slope oil fields will result in approximately 92 layoffs this month, potentially adding to sector unemployment levels that are already the highest in a decade.

But the oil field contractor that notified the state of the cuts last week believes the terminated workers could soon have new work opportunities.

The layoffs are happening because Hilcorp will be terminating many of the services provided by ASRC Energy Services at three oil fields starting Jan. 1, said Amanda Cascio, senior director of human resources at ASRC Energy, in a letter describing the cuts.

Hilcorp is expected to employ a new contractor that could hire some of the workers.

"We understand that Hilcorp is engaging a new service provider that will be seeking to employ potentially affected personnel," Cascio's letter said.

The Nov. 28 letter was sent to Lisa Mielke, coordinator of the state Rapid Response Team that seeks to find new jobs for terminated workers, and North Slope Borough Mayor Harry Brower Jr.

"We were surprised and disappointed by the decision, but understand that Hilcorp wants to reduce its costs in this challenging economic environment," Cascio said in the letter.

The layoffs will affect employees at the Milne Point, Endicott and Northstar fields operated by Hilcorp, including electricians and road and pad workers at Milne and Endicott. Among the groups not affected will be vehicle maintenance shop workers at the three fields, the notice said.

North Slope producers and explorers have laid off thousands of workers in recent years to slash costs, following the oil price slide that began in mid-2014.

After peaking at 13,485 jobs in March 2015, North Slope oil and gas employment has fallen to levels last seen a decade ago. In June, the sector employed 8,931 workers. That's less than the 9,193 workers employed 10 years earlier, said Neal Fried, an economist with the Alaska Department of Labor and Workforce Development.

Some areas of the North Slope are seeing increasing activity that is expected to result in more hiring, such as ConocoPhillips' pursuit of a large winter exploration program on the sector's western edge. Hilcorp has also proposed developing the large Liberty prospect in federal waters of the Beaufort Sea.

"There's no doubt the losses are slowing," said Fried on Monday. "The question is are the losses continuing right now, and I don't know that."

The oil and gas industry's high-paying jobs have a big impact on the state's struggling economy, and their levels are closely watched. In October, Alaska had the nation's highest unemployment rate at 7.2 percent, and the nation's worst job growth, down 1.3 percent from a year earlier, according to data from the state Labor agency.

ASRC Energy's planned layoffs are one of the largest reported by the sector to the state — a federal law requires notices of large reductions — since the industry downturn began. The state publishes information about the notices under the law, known as the Worker Adjustment and Retraining Notification Act of 1988.

The sector's largest layoff notice under the law since 2015 came in May when Norcon, another oil field contractor, announced cuts for 147 employees. That resulted from a change of contract that benefited ASRC Energy, creating an opportunity for the company at the Prudhoe Bay field operated by BP.

As for this latest reduction at the fields operated by Hilcorp, ASRC Energy said the layoffs will begin Dec. 18. They will end by Dec. 31.

ASRC Energy has about 40 open positions elsewhere in the company, Cascio's letter said. Affected employees who apply will receive priority consideration for those jobs, the company said. However, the employees will not receive bumping rights that allow affected workers to replace more junior employees.

Mielke said hopefully most of the terminated employees will soon have new jobs. But she added that it's uncertain how many of them will be absorbed into other positions.

Mielke said ASRC Energy quickly sent a list of the affected employees to the state. Mielke's team will use that information to contact the employees, in hope of finding new jobs for them, she said.

Hilcorp did not immediately respond to a request for comment.

Correction: An earlier version of this article incorrectly said North Slope oil field unemployment levels are the lowest in a decade. The sector's employment levels, not unemployment levels, are the lowest in a decade.